Hi. Did the person say why he/she thought it wouldn't work? I'm assuming from your question that the audio is coming from your TV - does your Vizio TV have an optical audio output?
I've looked at that equipment a bit this morning, and on the face of it, it appears that you should be able to run an optical cable into the Sound Blaster Z and run the 5.1 analog audio out to your speakers. I didn't see in the manual any mention of if the Sound Blaster can accept 5.1 Dolby Digital audio input over that optical connection, so perhaps it can't - but I'd think that it would.
Some notes:
(*) In order to connect up your PS3 and TV to that Sound Blaster Z card, you'd need an optical switch because it only has one input.
(*) If you are playing audio from your TV, but it's actually audio coming from an HDMI input on the TV (e.g. from a cable box), then it's likely that the audio will only be in stereo because a lot of TVs will convert 5.1 audio from an HDMI input into stereo audio for output over the optical audio connection.